While many publishers in the West struggle to build profitable paywalls, I recently reported that a paywall in the East may provide a blueprint for success.

That paywall was erected in Slovakia by a company called Piano Media. It brought together nine of Slovakia’s largest news publishers, and the early results are impressive given the size and characteristics of the Slovakian market.

What lessons can publishers learn from Piano Media’s paywall? To find out, I spoke with Tomas Bella, Piano Media’s CEO.

How difficult was it to get nine publishers to come to the table and agree to make their content available though a single subscription package?

We actually never got them to one table. We negotiated with each separately, persuading them one by one that they will get more revenue from joining Piano then if they will create their own system.

What helped is that most of them were thinking about charging for some type of the content anyway, but they were sometimes afraid of being the first one to do it, and often they were afraid they did not have enough unique content to be able to charge for it separately. So Piano solved several of their problems at once and they decided to give it a try.

What were some of the common concerns they had?

The obvious concern was whether it will work at all. For the publishers in Slovakia, our pilot country, it was really a leap of faith, based mostly on their previous several year-long experience working with companies that were behind the project, Etarget and NextBig.

The second concern was usually the price. The publishers would have liked for the price to be higher but we managed to persuade them that Piano has to become a mass product and that they will all earn more if they agree with psychologically low price – at least for the launch of the project.

If you had only been able to forge agreements with three or four publishers, do you think Piano Media would have been able to succeed? In other words, to succeed with a single subscription model, do all the publishers in a given market need to set up a paywall?

The biggest TV network in Slovakia, the biggest publisher and another major tabloid publisher in Slovakia stayed out of Piano so we definitely do not need everyone on board. That would be really very hard to imagine.

We simply needed enough to create a valuable package for the reader that is more attractive than any individual subscription. For Slovakia, we had target of six publishers and finally got nine, but there are countries where, according to our calculations, our model will work even when we get two major publishers to participate.

One of the interesting things noted in your first month results is that visits to the websites of publishers behind the Piano Media paywall actually increased. What sort of strategies allowed this to happen? Do you have any tips for publishers debating what should goes behind a paywall and what should remain free?

We do have quite a lot of data on what works behind the paywall and what does not as we tried 34 different services.

People are paying not only for the articles, but also for commenting, asking questions in forums, early access to the content, access to the archives, ad-free version and so on.

I should also mention that the two publishers that already had paid content and switched to Piano learned that people are willing to pay for some content in joint subscription but not if asked to pay only for access to one particular site.

For example, the daily “SME” asked readers to pay for “opinions” section in 2006 and had to abandon it, but they are not getting very good results with exactly the same section within Piano — 14 times more people are paying there compared to the first experiment.

So I would say there is probably almost no content valuable enough that a significant number of people will pay for it regardless of what the system looks like. You almost always have to get the price right, you have to create a variety of payment methods, offer great customer support, do a lot of usability testing and A/B performance testing.

We believe even with this it sometimes is not enough and you simply have to bundle the content with many other services to generate significant revenue.

A Piano Media subscription only costs €2.90/month. How was pricing determined, and is such an amount viable long-term? Do you think publishers need to adjust their cost structures, or can paid content, in concert with other revenue streams, support their organizations as they exist today?

I think no one knows — yet. Our pricing had one clear goal, to break a “will never pay” barrier. Once this is behind us, we will be able to experiment more with the pricing and get it to the level where it will be more aligned with the actual cost of producing the content.

In general, what percentage of their overall revenue do you think publishers should expect to generate from a paywall?

It clearly depends on the size of the publisher, but we already have one or two publishers for whom the first month revenue from Piano already reached a double digit percentage of all online revenues.

In general, if taking print revenues into account, I think paid content can generate something between 5-25% of all revenues within three years of starting the paywall.

Piano Media is looking at taking its model to other European markets. What differences between these markets and the Slovakian market, if any, do you anticipate having to address?

I think the hardest part, persuading the publishers in the first country to try the model, is already done. Also, most of the markets where we are heading have higher broadband internet penetration and many more people there are used to paying by credit cards (or paying for anything online) than in Slovakia so this will not be such a great obstacle in Western Europe and other developed markets.

We think the needs of both publishers and readers are in principle very similar in most of the mid- to small-sized countries.

We do not know yet how our system will work in big markets like UK, Germany, France or US — it will probably have be adjusted to work not only for major national media, but for media in certain region or media that are competing in certain segments (like the sport press or magazines for women).

Are publishers in Western Europe and the United States being shortsighted in trying to charge subscribers more for accessing content via a specific channel, platform or device, such as the iPad? Is it necessary to charge additional fees for multichannel access, or should a paywall span channels without discrimination?

People probably strongly prefer to get access to all channels for one payment. On the other hand, it is quite understandable that if publishers think that people will never pay online, or at least never pay enough online, they will try to extract revenue from channels like iPad where the resistance to payment is not as great.

We are hoping that more and more publishers will understand that “people will never pay on the web” mantra is just not true and move to a one-payment model that users find more convenient, although I don’t see any problem with charging separately for extra services that come only via one channel (let’s say iPad- only games or crosswords).